Banks in a hole over Rio Tinto failed deal

Investment bankers were today counting the cost of the failed iron-ore mining joint venture between Rio Tinto and BHP Billiton.

Credit Suisse, Morgan Stanley and Macquarie, which were all advising Rio, will miss out on fees. Lazards and Gresham Partners lost out on the BHP side.

The two mining firms today confirmed that they had ditched the plan for the world's biggest iron-ore venture after opposition from competition watchdogs around the world.

Shares in both Rio and BHP fell today, though the failure of the deal was widely expected after European regulators indicated they would block it.

The announcement marked the second failed attempt in three years by BHP chief executive Marius Kloppers to buy into Rio's superior iron ore assets, and strengthens the hand of steel mills which feared the pair would gain too much pricing control.

Ben Lyons, an analyst at ATI Asset Management, said: "The failure of the joint venture will be slightly more positive for Rio than BHP, but it's important to remember it's a negative for both companies."